‘Safe’ employers to save $200m in premiums in NSW
High-performing medium to large employers in NSW will collectively save $200 million in workers compensation premiums this year, the state government has announced.
Minister for Finance Dominic Perrottet said medium to large employers with good safety records would be rewarded with a reduction due to calculations, incentives and discounts under the state’s new premium incentive regime, while other businesses would pay premiums that reflect their true cost to the scheme.
“Today around 80 per cent of scheme costs are generated by the below average safety records of about a quarter of businesses, who pay about the same in premiums as other safe businesses,” the minister said.
“Under the new regime, businesses that keep their workers safe and help those that are injured return to work will only have to contribute about a third of total premiums – saving them collectively $200 million.
“The new regime will free up real money allowing NSW businesses who do the right thing by their workers to grow and invest in people and capital.”
Two-year cap on premiums
Vivek Bhatia, CEO of the state’s workers comp nominal insurer, icare, said a two year grace period would be extended to help businesses with higher than average claims improve their safety records. Annual premiums will be capped at 30 per cent above the average for the two-year period.
“We understand that circumstances are unique for every business and icare is open to talking directly to employers about their issues and working with them to help identify and fix the causes,” he said.
“After two years there will be no cap and these businesses will wear the true cost.
Call for additional support for businesses
According to the NSW Business Chamber, the government’s announcement shows it is on the right track in creating a fairer workers’ compensation system. However, the chamber’s CEO, Stephen Cartwright raised some concerns.
“The new premium calculation takes into account safety performance over the past three years, rather than two years as in the previous system, therefore there is a real risk that businesses that had previously thought their safety performance was satisfactory will experience significantly increased premiums,” he said.
“While the government has capped premium increases by 30 per cent for the next two years to ease the transition, the unexpected cost imposed on businesses is of real concern.
“Given the current economic climate, we would expect that the government’s commitment to providing additional support to impacted businesses through icare would extend to moderating short term cost increases as well strategic initiatives to improve safety performance in the long-term.”
“Built on the backs of the sick and injured”
Unions NSW assistant secretary Emma Maiden said it was inappropriate for businesses to benefit from any workers compensation surplus at the expense of injured workers.
“This further reduction in premiums for business is built on the backs of sick and injured workers. While we have no problem with a carrot and stick approach to encouraging safe work practices and good return to work practices we think premiums should not be reduced further given the huge cuts since 2012.
“Unions believe the best way forward is to increase premiums for employers that are doing the wrong thing and use all additional funds to support injured workers.”
Maiden said injured workers were being penalised 14.5% from the moment they were injured because of an immediate 5% cut in their wages and a cessation of superannuation payments from the employer.
“Now the scheme is back in the black, the government should look urgently at further reversing some of the severe cuts to the system that has treated injured workers and their families so callously. The government could ensure medical bills are paid for the duration of an injury and also increase payments if workers’ injuries deteriorate.
“If the government was fair minded it would look to helping the injured instead of putting more dollars into the hands of business. Given employers have already received premium cuts of up to 17.5% we call on the Baird Government to allocate any surplus back to injured workers. Let the scheme do what it was set up to do in the first place, provide much needed assistance to injured workers in their time of need,” Ms Maiden said.
By James Harkness
This article was originally posted on Workplace OHS a part of NSW Business Chamber – Australian Business Consulting and Solutions has a dedicated team of WHS/OHS experts who can assist you with your specific WHS/OHS issues and problems.
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